Los Gatos, California-based Netflix, Inc. (NFLX) is a provider of entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. With a market cap of $381 billion, Netflix's operations span over 190 countries worldwide. The entertainment giant is set to announce its fourth-quarter earnings after the market closes on Tuesday, Jan. 21.
Ahead of the event, analysts expect Netflix to report an adjusted profit of $4.21 per share, up a massive 99.5% from $2.11 per share reported in the year-ago quarter. The company’s earnings surprise history is mixed. It surpassed Wall Street’s bottom-line estimates thrice over the past four quarters while missing on one other occasion. Its adjusted EPS for the last reported quarter surged 44.8% year-over-year to $5.40, exceeding analysts’ estimates by 6.1%.
For fiscal 2024, Netflix’s adjusted EPS is expected to increase 64.4% year-over-year from $12.03 in fiscal 2023 to $19.78. While in fiscal 2025, its earnings are expected to grow 19.5% year-over-year to $23.63 per share.
NFLX stock prices have soared 83.1% over the past year, significantly outperforming the S&P 500 Index’s ($SPX) 23.3% returns and the Communication Services Select Sector SPDR ETF Fund’s (XLC) 33.2% surge during the same time frame.
Netflix stock prices surged 11.1% in the trading session after the release of its impressive Q3 results on Oct. 17. The streaming giant reported a robust 15% year-over-year growth in revenues, reaching $9.8 billion, driven by substantial growth in paid subscribers across various regions. Notably, streaming revenues from the Indo-Pacific region saw an impressive 18.9% rise compared to the year-ago quarter, amounting to $1.1 billion. This was fueled by a 24% year-over-year growth in paid memberships, reaching 52.6 million.
The U.S. & Canada and Europe, Middle East, & Africa regions also demonstrated strong performance, with revenue growth rates of 15.7% and 16.3%, respectively. However, the Latin America region lagged slightly, with an 8.6% year-over-year revenue increase to $1.2 billion, impacted by a decrease of 68,000 paid memberships during the quarter. In addition to the strong revenue growth, Netflix reported a significant surge in profitability. Its net income soared by 40.9% year-over-year to $2.4 billion, bolstering investor confidence.
The consensus opinion on NFLX is moderately bullish with an overall “Moderate Buy” rating. Out of the 41 analysts covering the stock, 22 recommend “Strong Buy,” two advise “Moderate Buy,” 15 suggest “Hold,” and two advocate a “Strong Sell” rating. As of writing NFLX is trading slightly above its mean price target of $852.58.
